More On CPI (Not To Be Confused With Moron CPI)

By The Inflation Trader: I posted Tuesday some thoughts that I tweeted right after the CPI figures were released Tuesday morning, and added a few ancillary thoughts as well. I figured that may be all that I would write, since CPI is clearly the most important release of the day and because I am hard at work on our Quarterly Inflation Outlook piece.But then I saw a number of headlines such as this:

"Retail Sales Edge Up, Inflation Flat as Energy Prices Fall"

"Tame Inflation, Strong Factory Data Lift Futures"

…and I realized I had to write Tuesday.It isn't true that core CPI was "as-expected" or that inflation was "flat." Of the 78 economists polled by Bloomberg about the monthly change in core CPI, one called for 0.0%, eight expected +0.1%, and the balance expected +0.2%. The average works out to be 0.184%. This is consistent with poll results on the questionComplete Story »

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TOKYO: Concerns about slowing growth in China pressured Asian shares and oil prices, while minutes from the US Federal Reserve's July meeting dented expectations for a rate hike in mid-September. Japan's Nikkei fell 0.3 per cent in early trade while MSCI's broadest index of Asia-Pacific shares outside Japan was almost flat, barely holding above its two-year low hit on Wednesday for now. "Markets are nervous of risks and investors are pulling funds out of emerging economies and resource exporters," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

The headlines on today's CPI jump of 0.4% are all over the map. If you want a slant one way or another you can find it.For example: Reuters says U.S. consumer prices post largest gain in more than two years.Bloomberg says U.S. Consumer Prices Fall Short of Expectations at 0.4%

Inflation unexpectedly fell in December.
The consumer price index dropped 0.1%, versus expectations for a flat reading, led by a decline in energy costs.
Compared to the previous year, CPI rose 0.7%.
Excluding food and energy costs, core CPI rose 0.1% month-on-month and 2.1% year-on-year.
According to Bloomberg, economists had estimated that headline CPI was flat in December compared to November, held down by gas prices. Excluding food and energy costs, they had forecast that core CPI was 0.2%.

WASHINGTON — The number of Americans filing new claims for unemployment benefits fell for the second consecutive week last week, suggesting a sharp step-down in job growth in December was likely to be temporary.
The better labor market tone was also captured by a survey on Thursday showing an acceleration in manufacturing activity in the Mid-Atlantic region, accompanied by a rise in factory jobs.
Even as the economy gathers steam there is little sign of a broad pick-up in prices, keeping inflation pressures muted.

WASHINGTON — U.S. consumer prices rose modestly in September but there was little sign of underlying inflation in the economy, which should give the Federal Reserve scope to maintain its monthly bond purchases.
The Labor Department said on Wednesday its Consumer Price Index increased 0.2% last month as energy prices rebounded, after edging up 0.1% in August.
In the 12 months through September, the CPI increased 1.2%, the smallest gain since April. It had advanced 1.5% in August.

WASHINGTON — U.S. consumer prices recorded their largest increase in nearly four years in February as the cost of gasoline surged, but details of the report on Friday showed no sign of a pickup in inflation to trouble the Federal Reserve.
The Labor Department said its Consumer Price Index increased 0.7% last month, the largest gain since June 2009, after being flat in January. Gasoline accounted for about three quarters of the spike in consumer inflation.
Economists polled by Reuters had expected the CPI to advance 0.5%.

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.This post is a guest contribution by Dian Chu, market analyst, trader and author of the Economic Forecasts and Opinions blog.